Comments on: Decisive euro action is needed at the G20 summit

By: barry66

barry66 — Tue, 19 Jun 2012 10:38:10 +0000

Why does Reuters still give a mouth piece to this deluded and incompetent ex chancellor / pnoney PM(never elected PM?)
He was a main culprit at the scene of the crime that is now the banking crisis.

By: bjhb

bjhb — Mon, 18 Jun 2012 20:30:37 +0000

I am not sure why you are even reporting comments by Gordon Brown, we have all been there and done it, and he dose not know what he is talking about

By: Maunsell

Maunsell — Mon, 18 Jun 2012 07:52:30 +0000

A couple of basics about real CAPITALISM

1. If a private sector entity can’t pay its bill when
they fall due it is insolvent and should be resolved
or liquidated
2. An industry that pollutes (i.e. transfers costs and
lossses onto taxpayers and society)should have to
pay for the cost of its effluent and/or have its
activities curtailed.

The Greenspan/Bernanke/Geithner doctrine of the last 15 -20 years has been to continously bail out the financial sector, in effect transferring the latters losses/costs onto society and taxpayers (usually via the central bank backdoor).

Angela Merkel realises better than most that the costs of this doctrine has reached its limits(one just has to look at government debt levels in Japan, UK, USA, Ireland, Spain) and that we need to change course.

Cries by the financial sector for yet more bailouts (via central banks) will eventually lead to even greater debt burdens on society and a substantial loss in value in fiat money and destruction of REAL WEALTH.

We can start changing this by
1. Allowing financial sector participants who invest in
insolvent banks or in sovereigns that can’t pay their
debts to take their losses (either up front or by
requiring the financial sector to pay for the related
losses over a number of years via a financial
transaction tax)
2. Having a proper bank resolution regime and the will
to use it. Sheila Bair at the FDIC and the Iceland
government showed that this can still de done.

3. Requiring banks to increase their capital, liquidity
and term funding levels substantially so that if
losses do occur they are borne by bank shareholders
first. Regulators need to restrict cash dividends,
cash bonuses and share buybacks until a solid capital
base is achieved.

4. Large banks need to be broken up to minimise the
costs to society should they fail.

5. Banks now treat central banks as 24/7 providers of
liquidity – bank wholesale debt providers were
willing to provide finance to banks at 3O times
leverage because they took it for granted that
Central banks would bail them out if required.
Central banks need to impose much more conditionality
on their funding (other than just pure collateral) –
eg they should be able to set restrictions around
dividends, bonuses,and share buybacks etc and mandate
disposals/breakups where required.

Re Mr Brown comments, the simple reason that many wholesale investor won’t provide certain EU banks with funding is that they think they have’nt got enough capital – these banks are easy to identify – they are the ones that the ECB has had to provide LTRO funding to -to fix this problem just get the ECB to convert its LTRO funding into equity in effect performing a large scale bank recapitalisation in one swoop.

Secondly if the G20 is serious about sorting out Europe sovereign debt issues then just get the G20 to agree to a worldwide financial transactioon tax. The EU could then transfer a sizeable portion of EU peripheral debt into one resolution fund and use their share of the financial transaction tax to pay it down over time.

By: bjhb

bjhb — Sun, 17 Jun 2012 18:07:50 +0000

Take no notice off what Gordon Brown is saying we have all been there and we are all bust

By: chrisb1959

chrisb1959 — Sun, 17 Jun 2012 10:41:12 +0000

What the world needs more than anything else are policies to stimulate economic growth. What seems to be causing a lot of the problems in the Eurozone is too much austerity as this goes contrary to creating growth. Here I blame Germany’s Angela Merkel for insisting that the austerity route is the best way forward. This attitide is driven by what happened to Germany in 1923 with hyperinflation. However, when there is economic growth it then becomes easier to clear one’s debt.

Gordon Brown states “Austerity means decreasing economic activity and then an ebbing of confidence” – he is 100% correct there. World leaders must take note of this and listen to the likes of François Hollande.

By: kchopra

kchopra — Sun, 17 Jun 2012 09:42:11 +0000

Investors the world over aren’t sure that the profits generated in the India can be easily and securely repatriated through normal banking channels. G20 meeting should address this simple question: in return for a gauranteed investment in the infrastructural projects in India, can India gaurantee the returns of investments? Indians can be asked to provide all manpower for the security needs the world over, plus contribute software services in return as payment on infrastructural investments in India. Additionally, Indians need to gaurantee export of food grains/rice at a mutually arrived figure. That way, growth environment can be generated the world over.

By: geniuz

geniuz — Sun, 17 Jun 2012 09:42:00 +0000

Gordon Brown is consistent in that he has been singing the same financial hymn since the crisis began. However, his European counterparts for some reason don’t want to tread the path that he advises they walk. Where does this great reluctance come from? Secondly, I think that his idea that the Chinese and the Oil-rich states partly fund European re-capitalisation is venturing into the realm of the fanciful. There is no way that these states would participate in this process as the decline of Europe means the ascension of these nations. Consequently, if they could contribute to European decline they would. It might mean momentary economic hardship on their part, but long term political re-positioning in their favour. The emerging economies do not want to see an all powerful Europe which is able to dictate trading terms as they do now. A politically weak Europe is more to their liking.
Finally, I believe that Mr. Brown is fundamentally wrong that recapitlaisation is the panacea to all European woes. It isn’t. It might be a short term stop gap, but the fiscal union of Europe would be the only long term remedy… and that will never happen! Ergo the only remedy is the reversion of the union to its pre-Euro union in which there was a perfectly sound economic and political cooperation, but not complete integration.

By: wer12121

wer12121 — Sun, 17 Jun 2012 05:23:10 +0000

good EU PLAN B:
Let South be obrero / migrant workers for Euro’s again.
This is how Eu once started.
Form the EU of willing of the North.
North is 80% anyway. what’s the point splitting between workers and spanish educated obrero’s …
Stop the debt AND flow free labour laws and south can pay.
A good economy needs dual labour laws. US/maxicans. Chineese rual workers ect.

By: WouldChuk

WouldChuk — Sun, 17 Jun 2012 02:52:24 +0000

I think…this IS “The Moment of Reckoning” we’ve all been hearing will never come. Just saying…

By: Doovle

Doovle — Sat, 16 Jun 2012 20:13:58 +0000

What is important hear, is whether you liked him or not he dose have a lot of insight and access to those that are in the know and thus having read what he has to say we would all be foolish not to pay attention to ignore him . Leaving aside the destructive gambling of the banks, no economy is going to grow unless the working or retired citizen has a growing amount of free cash in his hands , given that current austerity policies and low interest rates have made this impossible all governments are now looking down the barrel of lower tax revenues.We are now in a world of diminishing tax revenues and yet our governments are still inviting Armageddon by pouring billions into bailing out bankrupt banks and incredibly they still allow the giant corporates and the super rich to roam the world avoiding the tax revenues they desperately seek . They also allow in the name of free trade countries to exploit their markets destroying jobs , its not just a competitive issue , its the tax and currency manipulation along with subsidies that make these companies competitive not there product.How can it be right for companies like Amazon and Apple to do something like £14 Billion a year in the UK and not pay a penny in corporation tax , how many manufacturing jobs have been lost because of this tax advantage. I suspect this is going on all across Europe and America.

As for the Banks they need to let them go bust, pick them up from the liquidators for a £1 and re capitalise only the ones worth saving , make them transparent and introduce rapid changes that remove personal and business banking from the speculative propriety trading they are all engaged in . Introduce a global Robin Hood tax to get them to pay for the damage cause and raise revenues that are directly invested in projects that create jobs and build asset value .

Sadly Gordon the idiots at the table will not be able to agree on anything other than a thinly worded statement that will mean bugger all, and mate its pie in the sky stuff if you think China is going to be the saviour. !